Vermont Pension Board Rejects Fossil Fuel Divestment

Clean Yield's Eric Becker at the July VPIC hearing. Photo: 350 Vermont.

The staff assumes that since removing all energy holdings over the past ten years would have reduced returns by 0.6% per year, the same will be true in the next ten years. This is a terrible no-no in the world of CFAs and fiduciaries. Historical returns can tell you a lot about the past, but little about the future. There’s a very good reason that fund companies are required to state that past performance is not a guarantee of future results. And what they do tell you is generally the opposite of what the staff has concluded. Investment returns tend to revert to the mean.
Eric finished by calling for a truly independent analysis of the impacts of divestment from coal alone, and other fossil fuel companies more broadly.

350 Vermont and the Vermont chapter of the Sierra Club organized a presence both inside and outside the VPIC meeting.

If there is any silver lining to this dark cloud, it is that VPIC’s investment managers’ investment outlooks on the coal industry’s future are now on record. Not one is bullish, and several cited factors that point to coal’s long-term demise.
 
Related Articles
Statement of Eric Becker before the Vermont Pension Investment Committee, July 28, 2015
350 Vermont Memo to VPIC re Coal Divestment, July 17, 2015
Vermont Pension Board Will Not Divest From Fossil Fuels,” Vermont Digger, July 28, 2015
Fossil Fuels Stay in State Pension Portfolio,” Burlington Free Press, July 29, 2015
Vermont Pension Investment Committee Considers Divesting, Again,” Vermont Public Radio, July 28, 2015